Post on 04-Apr-2018
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No. Salary Structure
1 Basic Salary
2 DA
4 Computer Allowance
5 Conveyance (Transport)
Allowance
6 Foreign Allowance
7 Helper Allowance
8 Children Education Allownce
9 Children Hostel
Allowance(Amount granted tomeet hostel expenditure on
employee's children)
10 Electricity Expense Allowance
11 Conveyance Allowance
(Reimbursement-Fixed Amount
over & above the amount referred
at S.No. 5)
12 Outstation Allowance
13 Entertainment Expense Allowance
14 Clothing/Uniform Allowance
15 Bonus/Ex Gratia
3 HRA
16 Reimbursement of car expenses
in case of cars owned by the
employer
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17
Reimbursement of fuel bills in
case of car owned by theemployee.
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18 Reimbursement of scooter
expenses in case of scooter
owned by the employer.
19 Reimbursement of scooter
expenses in case of scooter
owned by the employee.
20 Leave Travel Allowance
21 Leave Encashment
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23 Provident Fund
22 Canteen Expense on monthly
fixed basis.
24 Gratuity
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25 Telephone Expenses/(Actuals)
27 Medical Reimbursement
Rent free Furnished
Accommodation:
Where accommodation is owned
by employer.
Where accommodation is taken
on lease or rent by the employer.
26 Medical Facilities
28
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Where accommodation is
provided by the employer in the
hotel (except where aggregate
period of stay does not exceed 15
days on his transfer from one
place to another).
31 Personal / Group Accident
Insurance Policy
29 Sweeper, gardener, watchman,
personal attendant
30 Interest free advances/ loans to
employee or anymember of his
household by the employer or
anyperson on his behalf.
32 Gift or voucher or token
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Movable Asset :
33 Gas, Electric Energy and
Water
34 Free or concessional fare.
35
Travelling, Touring,
accommodation and other
expenses
36
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Where any movable asset (other
than motor cars or laptops or
computers) belonging to employer
or hired by himfor the use of
employees or any member of
hishousehold.
Where any movable asset
belonging to employer are
transferred to employee directly or
indirectlyor any member of his
household.
In case of computers and
electronic items.
In case of motor cars.
37 Free education facility to
employee.
38
Free or concessional educational
facilties for any member of
employee's household.
39
Credit Card
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41 Stock Options
42 Any other benefit
Tax on Remuneration paid to
Technician (not
resident in any of four financial
years preceding
the year when he arrived in India)
Passage money or free or
concessional passage
45
40
Expenditure in Club
43 Tax on Perquisites Borne by
Employer
44
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on home leave or proceeding to
home country
after retirement to foreign
employees, not being
citizens of India.
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Exempt
Max exemption is restricted to least of the following three amounts:
1. 50% of salary (40% in case of cities other than metros
2. Excess of rent paid over 10% of salary
3. Actual amount of HRA received.
Exempt under S.10(14)/ Rule 2BB upto Rs. 800/- p.m. Exempt if
allowance is granted to meet his expenditure forthe purpose of
commuting between the place of hisresidence and the place of duty.
Exempt to the extent incurred on helper where such helper is engaged
for performance of official duties.
Exempt upto Rs. 100 p.m. per child for a maximum of 2 children.
Exempt upto Rs. 300 p.m. per child for a maximum of 2 children.
Exempt to the extent conveyance allowance is utilised for meeting
expenditure on conveyance for performing official duties.
Exempt where allowance is given to meet the expenditure on the
purchase or maintenance of uniform for wear during the performanceof official duties.
Expenses are met or reimbursed by the employer,
If car is used so far for official purposes,
No amount is taxable provided documents as specified in
Note A are maintained by the employer.
Note A: The following conditions should be fulfilled:
1. the employer has maintained complete details of journey
undertaken for official purpose which may include date of journey,
destination, mileage and the amount of expenditureincurred thereon;
2. the employer gives a certificate to the effect that the expenditure
was incurred wholly and exclusively for the performanceof official
duties.
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Earlier Rules: Where car is used for official purposes , not a perquisite
and hence not taxable.
Where maintenance & running expenses are met by employer
if car is used wholly for official purposes, nil
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provided the documents as specified in Note A above are maintained
by employer.
Earlier Rules:Where car is used for official purpose only , and
expenses are met by the employer, this will not amount to perquisite.
New rules for valuation of perquisites do not specify the treatment
under this case, hence old rules can be taken as the base for valuing
this perquisite.
Earlier Rules: If reimbursed for official use only , then not taxable.
Where expenses are met or reimbursed by employerfor the use for
official purposes, no value is taxable provided documents specified in
Note A above are maintained by the employer.
Earlier Rules:
Where expenses are reimbursed for the official use only , not taxable.
Exempt from tax under S.10(5) maximum upto twice in a block of 4
years.
(Current block- 1st January 2002- 31st December 2005)Exemption is
available for actual amount spent on travel to any place in India for
himself and his family as provided in Rule 2Bof Income Tax Rules.
If paid on retirement whether on superannuation or otherwise, amount
is exempt from tax to the extent of least of the following:
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a. Cash equivalent of leave salary in respect of period of earned leave
to the credit of an employee only at the time of retirement whether on
superannuation or otherwise.
b. 10 months average salary.
c. The amount not chargeable to tax as specified by Government
from time to time (at present Rs. 300,000/-)in case of employees
retire whether on superannuation or otherwise on or after 1.4.1998
d. Leave encashment actually received on retirement.
It shall not be a perquisite in the following cases
1. Free meals provided by the employer during office hours at office
or business premises or through paid vouchers which are not
transferable and are usable only at eating joints,if the value thereof in
either case is upto Rs.50 per meal.
2. Tea or snacks provided during office hours.
3. Free meals during working hours provided in a remote area or an
offshore installation.
Earlier Rules:
Refreshments/subsidised lunch or dinner
Exempt when provided in the office premises during workinghours. An
amount upto Rs. 35 per day if provided outside the place of work and
amount is paid by employer directly to caterer,restaurant etc. is
exempt.Contribution by an employer to recognised Provident Fund is exempt
upto 12% of salary.
For employees covered by the Payment of Gratuity Act:
Any gratuity received by employee is exempt from tax to the extent ofleast of the following:
1. 15 days salary for every completed year of service or part thereof in
excess of 6 months.
2. Rs. 3,50,000/-
3. Gratuity actually received.
In case of other employees:Any other gratuity received by an employee
on retirement, death, termination, resignation is exempt from tax to the
extent of least of the following:
1. Rs. 3,50,000/-
2. Half month's salary for each completed year of service.
3. Gratuity actually received.
Any provision for gratuity in the books of accounts by the company for
the benefit of employees is not taxable during the tenure of service of
the employees.
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Not Taxable
1. Medical insurance taken by the employer for the employee or any
member of the employee's familyor any reimbursement to employee
of insurance premium which he has incurred is exempt.
2. Reimbursement by employer, of expenses incurred by employee
on his medical treatment or that of any other member of his family in
any hospital maintained by Govt. or in a hospital approved by Govt. or
where payment is made by the employer directly to hospital etc.
approved by the Chief Commisioner of Income Tax in connection with
treatment of prescribed diseases orailments of employee or any
member of his family is exempt.
Reimbursement of such expenses are exempt upto Rs.15,000/- when
the expenditure is actually incurred by the employee.
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The value of accommodation in a remote area provided to an employee
working at a mining site or an on-shore oil exploration site or a project
execution site or at offshore site will not be treated as perquisite Aremote area means an area located at least 40 KM away from a town
having a population not exceeding 20,000 . A project site means a site
of project upto the stage of its commissioning. Off-shore site do not
have to meet the requirement of distance.
Note: No value would be charged if loans are made available for
medical treatment in respect of diseases specified in prescribed Rules
and where loans are petty, not exceeding in the aggregate Rs. 20,000/-
.
Earlier Rules:
Any such benefit given to employee is not taxable.
Premium amount paid by employer is exempt
No perquisite where the value is upto Rs. 5,000/- in aggregate during
the financial year.
However, gifts made in cash or convertible into cash, like gift cheques
etc. will be taxable as perquisite.
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Earlier Rules:
Not provided in the Earlier Rules. Should be taxable.
Earlier Rules:
If such benefit is used for official purposes, nothing would betaxable.
Earlier Rules:
Exempt where provision by any undertaking (employer) engaged
incarriage of passengers or goods, to employeefor free or at
concessional fare, where conveyance is owned bysuch undertaking.
Earlier Rules:Not taxable where travel for official purposes.
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Amount spent by employer for training/educating employee is exempt.
Where expenses are incurred wholly and exclusively for official
purposes, the amount is not taxable provided the following conditions
are fulfilled:
complete details in respect of expenses including the dateand nature
of expenses, are maintained;
a employer gives a certificate that expenditure is incurred wholly and
exclusively for performance of official duties;
Educational facilties to children of employee in educational institution
maintained and owned by emmployer or in any institution by reason of
his being in employment of that employer.Not taxable if value of such
benefit per child does not exceed Rs. 1000/- per month.
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If such expenditure is incurred wholly and exclusively for business
purposes, the amount is not taxable and the followed conditions are
fulfilled:
complete details in respect of expenses including the datenature of
expenses and its business expendiency, are maintained;
the employer gives a certificate that the expenditure
is incurred wholly and exclusively for performance of official duties.
Where use of health club, sports and similar facilties are provided
uniformly to all employees by the employer, no amount is taxable.
Earlier Rules:
Club Membership provided to an employee by the employer purely for
business purposes may not be considered as taxable in the hands of
employees.The value of any benefit provided by a company free of cost or at a
concessional rate to its employees by way of allotment of shares,
debentures or warrants directly or indirectly under any Employees
Stock Option Plan or scheme by the company offered to employees in
accordance with the guidelines issued in this behalf by the Central
Government, is not taxable
Where Employer at its option pay tax on the whole or part value of
perquisite (not provided for by way of monetary payments), on behalf
an
employee, without making any deduction from the income of the
employee, such amount of tax so paid by employer shall not be treated
as perquisite in the hands of the employee.
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Taxable
Taxable
Taxable
Taxable
Taxable
Taxable
Please refer tax treatment at S.No.16,17,18 & 19
Taxable
Taxable
Taxable
Where car is used for official and personal purposes:
Expenses are fully met or reimbursed by the employer,
where cubic capacity of engine does not exceed 1.6 litres,Rs. 1200/-
/ if exceeds 1.6 litres, Rs. 1600/- (+Rs. 600. If chauffeur is also
provided),
Where expenses for private use are fully met by the employee,
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where cubic capacity of engine does not exceed 1.6 litres, Rs. 400/-
if exceeds 1.6 litres, Rs. 600/- (+Rs. 600. If chauffeur is also
provided),
Where car is used for personal purposes Expenses incurred by
employer on running and maintenance of car plus value of normal
wear and tear plus remunerationpaid to chauffeur less amount
charged from employee, if any.
Where one or more car are owned or hired by the employer and the
employee or member of his household are allowed the use of such
motor car or all or any of such motor car(otherwise than for official
duties), value of perquisite shall be amount calculated in respect of
one car as if the employee had been provided one motor car for use
partly inperformance of his duties and partly for private purposes
and the amount calculated in respect of other car, as if provided
exclusively for private purpose.
Normal wear and tear shall be taken at 10% p.a. of the acutal costof the motor car.
Earlier Rules:
When car is owned or hired by the employer and is used partly for
official and partly for private purposes and the running &
maintenance expenses are met by the employer and it is difficult to
identify value of private use then the perquisitevalue will be Rs.600
p.m./Rs.800 p.m. where h.p. rating does not exceed16/ exceeds 16
(plus Rs.300 p.m. where chauffeur is provided)
When car is used for private purpose,Amount actually incurred by employer for running & maintenance of
the car, normal depreciation, if it is owned by the empoyer or hire
charges, if car is hired and remuneration paid to chauffeur is
taxable
Where one or more cars as owned or hired by the employer are
allowed to be used by the employee (otherwise than wholly and
exclusively for official duties), value of perquisite shall be amount
calculated in respect of one car as if the employee had been
provided one motor car for use partly in performance of his duties
and partly for private purposes.
Where maintenance and running expenses are met by employer, if
car is partly used for officialpurposes and partly for privatepurposes, subject to Note B below, the actual expenditure incurred
by employer as reduced by Rs. 1200/- /Rs. 1600/- depending upon
the cubic capacity of engines and Rs. 600/- for chauffeur, if
provided.
Note B:
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Where the employer or the employee claims that the motor caris
used wholly and exclusively in the performance of official duty or
that actual expenses on the running and maintenance of the motor
car owned by the employee for official purposesis more than the
amounts deductible as mentioned above he may claim a higher
amount attributable to official use and the value of perquisite shall
be actual amount of charges met by employer as reduced by such
higher amount attributableto official use of the vehicle provided
conditions in Note A above are fulfilled.
If used for private purpose only, then actual amount spent on
running, maintenance & normal wear and tear is taxable.
Earlier Rules:Where car is owned by employee and used for
official and private purposes and expenses are met by employer, a
reasonable proportion of the sum actually spent by the employer
attributable to personal use is taxable.Where car is used for private
purposes only , actual expenditure of the employer is taxable.
New rules for valuation of perquisites do not specify the treatment
under this case, hence old rules can be taken as the base for
valuing this perquisite.
Earlier Rules:If used for private purpose only , then actual amount
spent on running, maintenance & normal wear and tear is taxable.
If used partly for official and partly for private purpose , areasonableproportion of the amount actually spent by the employer
for running,maintenance & normal wear and tear is taxable.
Where car is used for official and private purposes, subject to Note
B above, the actual expenditure incurred by employer as reduced
by Rs.600/- .If used for private purpose only, then actual amount spent on
running, maintenance & normal wear and tear is taxable.
Earlier Rules: Amount reimbursed by the employer for private
purpose is taxable. Amount reimbursed by the employer for the
use of official & private purpose , a reasonable proportion of theamount reimbursed is taxable.
Taxable if paid during continuance of employment.
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Otherwise the amount of expenditure incurred by the employer is
taxable.
Any gratuity paid to an employee while still in service is
taxable.
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Expenses on telephones including mobile phone actually incurred
on behalf of employee by employer shall not be taxable in the
hands of employee.Earlier Rules:May be considered as exempt
depending upon the nature of job.
In case accomodation is in cities having populationexceeding 4 lacs
- 10% of Salary7.5% of Salary in other cities.
In respect of period for which accommodation was occupiedby the
employee, as reduced by the amount of rent if any, paid by
employee.
Actual amount of lease rental paid by employer or 10% of salary,
whichever is lower as reduced by the rent, if any, actually paid by
the employee.
The value of perquisite, as determined in either of the cases above,
is increased by 10% of cost of furniture (p.a.) (including television
sets, radio sets, refrigerators, other household appliances, air
conditioning plant or equipment or other similar appliances) or if
furniture is hired, the hire charges, as reduced by the amount, paid
by employee.
24% of salary or actual charges to the hotel, whichever is lower, for
the period during which such accommodation isprovided as
reduced by the rent,if any, paid by employee.
Earlier Rules:In case accommodation is in Delhi, Bombay, Calcutta & Madras (or
in other cities):
1. If fair rent is less than 10% of salary, fair rent is taxable.
2. If fair rent is 10% of salary or more but not more than 60%
ofsalary (50% in case of other cities), 10% of salary is taxable.
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3. If fair rent exceeds 60% of salary, (50% in case of other
cities),fair rent minus 50% of salary (40% in case of other cities)
is taxable.
If any furniture is also provided by the company to the employee
then either 10% of original cost of assets purchased or any hire
charges paid for furniture, whichever is applicable, shallbe added to
the cost of such accommodation.
Where accomodation is provided at concessional rent, the
valuation will be made as if employee had been provided rent free
accomodationand amount so computed will be reduced by rent
payable by employee.
Where employer has provided sweeper, gardener,
watchman,personal attendant, the actual cost to the employer shall
be taxable as perquisite which is total amount of salary and
allowances paid to them as reduced by amount paid by employee.
Earlier Rules:
a. When sweeper, watchman or gardener are recruitedandremunerated by employer- Rs. 120 p.m. per person is
taxable.However, if employed by employee and the amount paid to
such persons is reimbursed by employer to employee, then the
entireamount so reimbursed is taxable in the hands of employee.
b. Any other servants, entire amount spent on other servants is
taxable.
Sum equal to simple interest @ 10% p.a. in respect of loans for
house and conveyance and @ 13% p.a. for other loans on
maximum outstanding monthly balance (aggregate outstanding
balance for each loan as on the last day of each month)
Value of perquisites shall be sum equal to the amount of giftor
voucher or token in lieu of which such gift may be received by the
employee or by member of his household on ceremonial occasions
or otherwise.
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Where supply is made from resources owned by the employer
without purchasing them from any other outside agency,
manufacturing cost per unit incurred by employer. Where supply is
made by purchasing from outside agency, amount paid to supplying
agency is taxable less any amount paidby the employee.
Earlier Rules:
Where employer has supplied gas, electricity & water from own
sources, not taxable
Where provided by purchasing from outside agency,any such
benefit provided and used partly for official andprivate purposes
will be taxable @ 6.25% of salary or the actualamount spent
whichever is less.
If such benefit is used for private purposes, amount actuallyspent
is taxable.
Provision by any undertaking engaged in carriage of passengers or
goods to employee or to any member of his household for free or atconcessional fare, in any conveyance owned, leased or made
available by any other arrangement by the undertaking, value at
which such benefit or amenity is offered by such undertaking to the
public as reduced by amount recovered from employee.
Note: This sub rule is not applicable to the employees of
railways from 1.4.2001.
Where such expenses are borne or reimbursed by employer for any
holiday other than leave travel allowanceavailed by employee or
member of his house, amount incurred by employer.
Where such facility is maintained by employer and is not available
uniformly to all employees, value at which suchfacilties are offered
by other agencies to the public.
Where employee is on official tour and expenses are incurred in
respect of any member of his houseaccompanying him, amount of
such expenses.
Where official tour is extended as a vacation, value shall be limited
to expenses incurred in relation to such extended period of stay or
vacation
Value shall be determined @ 10% p.a. of actual cost of such asset
or amount of rent or charge paid or payable by employer.
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Actual cost of asset to employer as reduced by normal wear and
tear @ 10% of such cost for each completed year during which
asset was put to use by employer.
Actual cost to employer as reduced by normal wear and tear @
50% by reducing method.
Actual cost reduced by normal wear and tear @ 20% by the
reducing method.
Earlier Rules:Tax may be computed on the written down value at
which the asset istransferred as reduced by the amount recovered
from the employee.
Amount spent by employer for free or concessional educational
facilties for any member of employee's household is taxable.
Education facilties to employee's family members in institution
maintained by employer or in any other, educational institution byreason of his being inemployment of that employer . Cost of
education in a similar institution in or near the locality shall be the
amount ofperquisite.
Earlier Rules:
Reimbursement of expenditure incurred for education of family
members of employee is fully taxable.
The amount of expenses including membership fees and annual
fees incurred by the employee or member of his household charged
to a credit card including add-on card,provided by employer or
otherwise, paid for or reimbursed by employer shall be taken as
value of perquisite.
Earlier Rules:
Taxable where used for private purposes.
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Actual amount of expenditure including annual or periodical fee or
incurred by employee or by any member of his household.
Where corporate membership of club is obtained by employer,
which is enjoyed by employee or any member ofhis house, value of
perquisite shall not include initial fees paid for acquiring corporate
membership.
Any profit and gains arising from the transfer of
shares/debentures/warrants alloted under ESOP shall be
chargeable to income tax under the head 'capital gains' and shall be
deemed to be income of previous year in which transfer took place.
Any other benefit, amenity, service, right or priviledge provided by
the employer shall be determined on the basis of cost to the
employer as reduced by employee's contribution, if any.
The tax if borne by employer on the remuneration of technician,
shall now be taxable in the hands of such technician.
Earlier Provisions:
The tax so borne by employer was not included in the computation
of
total income of technician and thus was exempt from tax.
The amount of passage money etc. so provided to the employees
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